Why India is Test Bed for Pooling Private, Institutional Capital for Social Projects

Asia-Pacific has made real, measurable headway on the SDGs. The Asia and the Pacific SDG Progress Report 2025 from UN ESCAP shows the region outperforming the global average on several fronts, including reducing income poverty, tackling undernourishment, supporting small-scale industries, cutting hazardous waste, and addressing land degradation. At the same time, the report reflects that progress varies significantly across countries and goals, shaped by differences in institutional capacity, fiscal priorities, and investment ecosystems.

India captures this complexity well. It has made notable progress in areas such as digital public infrastructure, financial inclusion, and renewable energy, while continuing to work through challenges around climate resilience and livelihoods.

Climate finance is often framed as a returns challenge, but it is equally a market design challenge. Many climate solutions, particularly in adaptation, nature and resilience, have long development cycles and outcomes that are harder to monetise than traditional infrastructure or technology investments.

Much of adaptation creates value through losses avoided rather than revenues generated. A flood-defence, a heat-resilient supply chain or a drought-resistant agricultural system can generate significant economic value, but not a predictable revenue stream that an investor can underwrite. There is also a mismatch in tenor and currency, since these investments often carry long payback periods and earn in local currency, while institutional investors may work to shorter horizons or need hedged exposure.

So the issue is not simply that investors are seeking higher returns. Better project pipelines, risk-sharing mechanisms, more predictable revenue models and stronger data would address these constraints and let different forms of capital participate according to their own risk and return expectations.

No model can be replicated as is, because every market has its own regulatory environment, capital landscape and social priorities. What travels are the underlying principles, adapted locally, rather than emulated outright.

For example, India and Indonesia have each generated principles others now draw on. India's work on development impact bonds (DIBs) shaped how Southeast Asia thinks about paying for outcomes rather than activities. Indonesia has done the same for government-anchored blended finance. Through SDG Indonesia One, backed by state-owned PT Sarana Multi Infrastruktur, it pooled public, private and philanthropic capital to de-risk sustainable infrastructure, then issued Southeast Asia's first sovereign SDG bond, raising EUR 500 million in 2021. Neither has been lifted wholesale elsewhere, but both changed how their neighbours design finance.

India is well positioned to play that role because it combines scale, policy innovation and an increasingly sophisticated ecosystem of philanthropy, family offices and institutional investors.

Development impact bonds such as the Educate Girls DIB and the Utkrisht Impact Bond in maternal health showed how outcomes-based structures could bring commercial and institutional capital in alongside philanthropy. In healthcare, the SAMRIDH Healthcare Blended Finance Facility, backed by NITI Aayog and development partners, has shown how concessional and commercial capital can be layered to expand access to affordable healthcare services.

That approach of building around shared outcomes has travelled beyond India in concrete, traceable ways. The Educate Girls DIB helped establish the outcomes-based financing architecture that the Education Outcomes Fund, hosted at UNICEF, has since taken to Africa, including a $30 million programme with the Government of Ghana and the World Bank and an $18 million initiative with the Government of Sierra Leone, both built on the pay-for-outcomes structure first proven in Rajasthan.

India is one of AVPN's priority markets, not only because of its scale but because of the innovation taking place across philanthropy, impact investing and social enterprise. Our focus is on strengthening the ecosystem by connecting capital providers with high-impact opportunities, building the capacity of social purpose organisations and supporting collaborative financing approaches that bring together philanthropy, business and government. Hosting the AVPN Global Conference 2026, our flagship conference now in its 13th year in New Delhi, is an important milestone in that journey, creating a platform for regional and global leaders to exchange ideas, forge partnerships and mobilise capital for impact.